Leeds Group Regulatory News (LDSG)

Issued on behalf of Leeds Group plc Embargoed: 7.00am

Date: 29 February 2024

Leeds Group plc 

("Leeds Group" or "the Group" or "the Company'') 

Unaudited Interim Results for the six months ended 30 November 2023

The unaudited interim results of Leeds Group for the six months ended 30 November 2023 are presented as follows.

This announcement contains inside information for the purposes of UK Market Abuse Regulation and has been arranged for release by Jan G Holmstrom, Chairman. The Directors of the Company accept responsibility for the content of this announcement.

Enquiries: 

Leeds Group plc Cairn Financial Advisers LLP 

Dawn Henderson - 01937 547877 Sandy Jamieson / Liam Murray - 020 7213 0880

Chairman's Statement 

On 15 December 2023, the Board announced that they had conditionally agreed to sell the entire issued share capital of its subsidiary, Hemmers-Itex Textil Import Export GmbH ('Hemmers'), to a subsidiary of Nooteboom Bidco GmbH ('purchaser'). The cash consideration will be approximately £569,000 and is based on the net assets of Hemmers at 30 November 2023, excluding its properties, less an agreed discount. This figure differs from the figure stated in the circular as Hemmers made larger than expected losses in November. Leeds Group will retain three properties currently owned by Hemmers which have an aggregate net book value of £5,209,000.

The disposal was subject, inter alia, to the approval by Leeds Group shareholders at a general meeting and competition clearance from the German Cartel Office. The Leeds Group shareholders approved the proposed sale at a general meeting held on 9 January 2024 and on 22 January 2024, the Company received confirmation that the German Cartel Office had cleared the transaction to proceed. The Company is currently waiting for the purchaser to complete the refinancing of the existing Hemmers loans in order for the proposed sale to be completed. This is expected in March 2024. The assets of Hemmers have, therefore, been shown in the accounts as an asset held for sale and its operations have been classified as a discontinued operation.

Going forward the Company will have no trading activities as such although through LG Nordhorn Property GmbH ('LG Nordhorn'), it will own the three properties transferred from Hemmers and these properties will be leased back to Hemmers generating an expected average rental income of approximately £440,000 per annum over the next five years, which will cover the operating expenses of the Company for those five years.

Following the proposed sale, the Board will consider the future of the Group given the Group will be classed as an AIM Rule 15 Cash Shell. As such, the Company must make an acquisition or acquisitions which constitute a reverse takeover under Rule 14 of the AIM Rules within six months of Completion or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million) failing which the Ordinary Shares would then be suspended from trading on AIM pursuant to Rule 40 of the AIM Rules. Admission to trading on AIM would be cancelled six months from the date of suspension, should the reason for the suspension not have been rectified.

Jan G Holmstrom

Chairman

29 February 2024

Consolidated Statement of Comprehensive Income

*Other comprehensive income for the period/year relates it items that are or may be reclassified subsequently to profit or loss

Foreign operations - foreign currency translation differences

Consolidated Statement of Financial Position

Consolidated Cash Flow Statement

Consolidated Statement of Changes in Equity

The following describes the nature and purpose of each reserve within equity:

Notes to the Interim Results

for the six months ended 30 November 2023

1. General information

Leeds Group plc is an AIM listed public company, limited by shares and incorporated in England and Wales under the Companies Act and its number is 00067863. The address of the registered office is Craven House, 14-18 York Road, Leeds, Wetherby, LS22 6SL.

The interim results for the six months ended 30 November 2023 and 30 November 2022 are unaudited. The interim financial statements have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted in the United Kingdom ("UK adopted IFRS") using the accounting policies and methods of computation that were applied when preparing the most recent financial statements for the year ended 31 May 2023. The Group has chosen not to comply with IAS 34 'Interim Financial Statement' in these interim financial statements.

The information presented for the year ended 31 May 2023 does not constitute the Company's statutory accounts but are extracted from the audited accounts. The financial statements for the year ended 31 May 2023 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for the year ended 31 May 2023 was qualified on the basis that they were unable to obtain sufficient audit evidence in respect of the subsidiary KMR and its performance, as stated within the Consolidated Statement of Comprehensive Income under discontinued operations. Except for the qualification noted above the Independent Auditor's Report on the Annual Report and Financial Statements for the year ended 31 May 2023 did not contain a statement under section 498(2) of the Companies Act 2006 or section 498(3).

2. Accounting policies

Going Concern

When considering its opinion about the application of the going concern basis of preparation of the financial statements, the Directors have assumed that the proposed sale completes in March 2024. They have also prepared other forecasts and sensitivities in case the proposed sale does not complete. Based on all scenarios, the Directors are of the opinion that it is appropriate to apply the going concern basis of preparation to the financial statements.

2. Loss per share

Ordinary shares of 12 pence each used in the calculation of earnings per share:

3. Segmental information

4. Analysis of net bank debt

5. Disposal subsidiary held for sale

On 15 December 2023, the Board signed a conditional agreement to sell the entire share capital of Hemmers, its trading subsidiary in Germany. Accordingly, the net assets of Hemmers have been presented as a subsidiary held for sale in these financial statements and classified as a discontinued operation. The sale is expected to complete in March 2024.

Impairment

The proposed sale price for Hemmers is based on the net assets as at 30 November 2023 excluding freehold properties with a net book value of £5,209,000, and its intercompany loan with the holding company of £2,589,000 less an agreed discount of £4,487,000. The non-monetary assets of Hemmers as at 30 November 2023 have, therefore, been written down by the amount of the discount which has been allocated on a pro-rata basis.

Assets and liabilities of subsidiary held for sale

At 30 November 2023, the subsidiary was stated at fair value and comprised the following assets and liabilities:

6. Forward-Looking Statements

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.